Is the tax on my restaurant bill in Lahore, Karachi or Peshawar charged under FBR law?

The tax line on a restaurant bill in Lahore, Karachi or Peshawar is not charged under the federal laws this site holds. The federal law that taxes restaurant services, the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, extends only to Islamabad. The federal Sales Tax Act, 1990 exempts prepared restaurant food as goods. What is left is provincial law, and this corpus does not contain it.

What does the law say?

The ICT Ordinance stops at Islamabad. Section 1(2) of the Ordinance says: “It extends to whole of Islamabad Capital Territory.” Section 3(1) then charges sales tax on “the value of the taxable services rendered or provided in the Islamabad Capital Territory”. Serial 1(ii) of Table-1 of its Schedule, which covers restaurants, cafes, coffee shops, deras, food huts, eateries and similar outlets, is part of that Ordinance and so has the same reach.

Federal sales tax on goods exempts restaurant food. Section 13(1) of the Sales Tax Act exempts supplies of goods specified in the Sixth Schedule, subject to conditions the Federal Government may specify. Table-2 of that Schedule, headed “Local Supplies only”, has serial 53: “Prepared food or foodstuff supplied by Restaurants and caterers”. Nothing in that entry limits it to Islamabad.

Provincial sales tax on services is outside this corpus. Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan each have their own law on sales tax on services. This site holds none of them, so it gives no provincial rate, threshold or procedure.

How does it work in practice?

For a diner outside Islamabad, the federal laws answer two questions and leave a third open:

Question	Answer in this corpus
Is the food charged federal sales tax as goods?	No, serial 53 of Table-2 of the Sixth Schedule exempts it
Do the ICT rates of 5% (card) and 15% (cash) apply?	No, the ICT Ordinance extends only to Islamabad Capital Territory
What tax is on the bill, and at what rate?	Provincial law, not covered here

The bill itself may still show an FBR invoice number or QR code if the restaurant is integrated with FBR under the Sales Tax Rules, 2006. That is a question of invoicing and reporting, not of which law charges the tax on the service.

Worked example (illustrative figures)

Three friends have lunch at a restaurant on MM Alam Road, Lahore. The bill shows food of Rs. 5,000 and a separate tax line.

1. Federal sales tax on goods. The food is prepared food supplied by a restaurant, so serial 53 of Table-2 of the Sixth Schedule exempts it. There is no federal charge at the eighteen per cent rate in section 3(1) of the Sales Tax Act on the Rs. 5,000.
2. ICT Ordinance. The restaurant is in Lahore, not Islamabad Capital Territory. Section 1(2) means the ICT rates do not apply, whether they pay by card or cash.
3. The tax line. On these facts it would rest on Punjab’s law on sales tax on services. This site cannot say what rate that law sets or whether the figure on the bill is right.

Compare the same Rs. 5,000 lunch in F-6, Islamabad. There, serial 1(ii) of the ICT Schedule applies: Rs. 5,000 x 5% = Rs. 250 if paid by card, or Rs. 5,000 x 15% = Rs. 750 if paid in cash.

What if …?

What if the restaurant chain has branches in both Islamabad and Karachi? Section 3(1) of the ICT Ordinance looks at services rendered or provided in Islamabad Capital Territory. The Islamabad branch is taxed under it. The Karachi branch is not, and any tax on its services would come from provincial law outside this corpus.

What if the bill says “GST” or “sales tax”? The label on the bill does not tell you which law applies. The federal Sales Tax Act exempts the food, so a tax line on a restaurant meal outside Islamabad points to provincial law.

What if I think the tax on my Lahore bill is wrong? How a provincial tax is challenged is set by provincial law, which this site does not cover. FBR’s invoice verification under the Sales Tax Rules, 2006 is a separate process.

Common mistakes

• Assuming every tax on a bill is an FBR tax. The federal laws here either do not reach the provinces (ICT Ordinance) or exempt the food (Sales Tax Act).
• Quoting Islamabad’s 5% or 15% for another city. Those rates are in the ICT Schedule and apply only in Islamabad Capital Territory.
• Treating serial 53 as covering the service. It exempts the food as goods. It does not decide the tax on the restaurant’s service under any law.

What to check in the official text

Read sections 1 and 3 and serial 1 of Table-1 of the Schedule in the ICT (Tax on Services) Ordinance, 2001 as amended to 30 June 2025, and section 13 with Table-2 of the Sixth Schedule in the Sales Tax Act, 1990 as amended to 30 June 2026. For the rate on a restaurant bill in Punjab, Sindh, Khyber Pakhtunkhwa or Balochistan, the provincial sales tax on services law of that province is the text to read.